MELI is a strong long-term hold; FCF-based valuation suggests significant upside from current levels.

Its largest centers today are Lululemon, Molina Healthcare, and Mercado Libre. Boring. There is no story. Guys, the only tweets and the only stories about Lululemon say that this company is finished. They're all bad stories.

The second stock, " Mercado Libre," makes up 12% of Perry's portfolio. This company is essentially the " Amazon" of Latin America. I bought it from "Mercado Libre", and it is very convenient and easy.

We have properties in Mexico, and when I am there, if I want to order anything, it arrives very easily .

So, it is a company with a market value of $92.5 billion and an institutional value of $130 billion. This means $38 billion in debt. The good news is that they achieved a free cash flow of $12.4 billion last year.

Therefore, they can probably handle that easily.

But this is what's interesting. They generated $12.4 billion in free cash flow last year. Net income was only 1.8 billion. $6 billion annually over the past five years . Net income was only 1.3 billion over the last five years.

There is a significant discrepancy between free cash flow and net income, which is why you see a price-to- free cash flow ratio of 7.5 versus a P/E ratio of 50.

Why does their free cash flow differ so much from their net income ? Guys, great returns on capital. 19 % last year, and 31% annually over the past five years. Good gross profit margin, 43%.

Look at the revenue growth rates . The growth rate over 10 years is 48%. For 5 years, 45%. For a period of 3 years it is 40%. Right now, their profit margin is much lower than we would like. That's okay .

Now, it's not all good , but here's what's happening. For this column, the outstanding shares have risen slightly, by 0.66% over the past five years overall. It's not one percent a year, so I'll ignore that.

Remember that the price-to-earnings ratio and the price-to- free-cash-flow ratio are very different because they report a higher free-cash flow. If their free cash flow is genuine, I don't even care about the price-to- earnings ratio.

It can display any value you want. Therefore, this stock could become a five-column stock very quickly .

Analysts expect earnings to rise from $38 per share this year to $175 per share in the next four years. This is enormous. Absolutely incredible. It is likely that free cash flow and net income have become more closely aligned.

And look at the revenue growth. Revenue growth of 45%, 28% , 25%, 30%, and 25%.

I will use revenue growth rates of 10%, 18%, and 26% for the next ten years. That's too much by any measure. Next, profit margin and free cash flow . Remember, we focus on free cash flow because it is much higher.

Free cash flow is the true lifeblood of a business. Therefore, I want it much more . Therefore, I set free cash flow margins of 28%, 32%, and 36%. As you can see, the situation is improving.

The average for 10 years started at 29%, for 5 years at 31%, and for one year at 35%. So he continues to improve. This may be a conservative estimate, but I don't mind.

Next, the price-to- earnings ratio 10 years from now. With high returns on capital, and being the "Amazon" of Latin America, I would put 19, 22, and 25. The stock price is currently 1831.

Guys, look at this. Based on the free cash flow , I have a low price of 5600 and a high price of 30,000. An average price of 13,000.

Now, I must address the question: Will they compete with Amazon? Will Amazon step in and replace them? I have no idea. That is perhaps their biggest problem. Or, could Amazon buy them? This is the question that should be asked.

These numbers seem illogical. We are talking about returns of 40% here. What interests me is that this looks like a company you'd want to own for a long time. Barry doesn't seem to be the type of person who holds onto stocks for long periods.

He wants to find short-term pricing errors and build on them.